Going-Private Decisions and the Sarbanes-Oxley Act of 2002: A Cross-Country Analysis

Posted: 1 Dec 2009

See all articles by Ehud Kamara

Ehud Kamara

affiliation not provided to SSRN

Pinar Karaca-Mandic

RAND Corporation

Eric L. Talley

Columbia University - School of Law; European Corporate Governance Institute (ECGI)

Date Written: 2005

Abstract

This report investigates whether the regulatory regime created by the Sarbanes-Oxley Act of 2002 (SOX) has driven firms in general, and small firms in particular, out of the public capital market. Previous attempts to address this question have had difficulty controlling for other factors that could have affected exit decisions aroung the enactment of SOX. To address this difficulty, we examine the post-SOX change in the propensity of public American target firms to favor private acquirers over public ones with the corresponding change for foreign target firms, which were outside the purview of SOX. Our findings are consistent with the hypothesis that SOX induced small firms, by contrast, do not appear to have been affected. (Publication abstract)

Keywords: Market capitalization, VentureXpert dataset, Morgan Stanley Company International, Inc., Sarbanes-Oxley Act of 2002, Valuation, Public firms, Financial markets, Private firms, Private offerings, Firm ownership, Firm size

Suggested Citation

Kamara, Ehud and Karaca-Mandic, Pinar and Talley, Eric L., Going-Private Decisions and the Sarbanes-Oxley Act of 2002: A Cross-Country Analysis (2005). University of Illinois at Urbana-Champaign's Academy for Entrepreneurial Leadership Historical Research Reference in Entrepreneurship, Available at SSRN: https://ssrn.com/abstract=1513806

Ehud Kamara (Contact Author)

affiliation not provided to SSRN

No Address Available

Pinar Karaca-Mandic

RAND Corporation ( email )

1776 Main Street
Santa Monica, CA 90407
United States

Eric L. Talley

Columbia University - School of Law ( email )

435 West 116th Street
New York, NY 10025
United States

HOME PAGE: http://www.erictalley.com

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

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